{"id":15760,"date":"2020-10-03T08:22:03","date_gmt":"2020-10-03T12:22:03","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=15760"},"modified":"2020-10-13T18:14:23","modified_gmt":"2020-10-13T22:14:23","slug":"nudge-theory-change-management","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/nudge-theory-change-management\/","title":{"rendered":"Nudge Theory: Change Management for Humans"},"content":{"rendered":"\n

What is the Nudge <\/em>theory of change management<\/a>? How do you encourage changes with nudges?<\/p>\n\n\n\n

Nudge <\/em>theory uses gentle directing or pushing to get people to make certain choices. Under Nudge <\/em>theory, change management is about the individual.<\/p>\n\n\n\n

Read on to understand the Nudge <\/em>theory, change management, and how to use nudges to push in the right direction.<\/p>\n\n\n\n\n\n\n\n

Nudge Theory of Change Management<\/h2>\n\n\n\n

Given humans\u2019 innate propensity to make poor choices<\/a>, whether through cognitive bias<\/a> or social conformity or animal desire, are good decisions simply beyond us? Is there any way, other than severely restricting the number of choices available to us, that public and private entities can help us help ourselves?<\/p>\n\n\n\n

Under Nudge <\/em>theory, change management comes with the embrace of a new movement: libertarian paternalism<\/a><\/strong>. <\/p>\n\n\n\n

Libertarian paternalism seeks to preserve liberty\u2014that is, our freedom to do what we like, as long as it doesn\u2019t infringe on another\u2019s opportunity to do the same\u2014while using techniques suggested by behavioral economics and psychology to point us in the most beneficial direction. In a libertarian paternalistic world, the public and private entities that present us with choices \u2014\u201cchoice architects,\u201d in Thaler and Sunstein\u2019s terminology\u2014use subtle strategies to push us toward the \u201cright\u201d choices. These \u201cright\u201d choices are the ones we would make for ourselves if we weren\u2019t susceptible to cognitive bias, temptation, or social influence. <\/p>\n\n\n\n

The Nudge <\/em>theory of change management uses small pushes. These pushes, so subtle that the average person wouldn\u2019t even recognize them as influencing his or her decision, are what Thaler and Sunstein call \u201cnudges.\u201d <\/strong>An effective nudge takes advantage of our decision-making<\/a> weaknesses to steer us toward beneficial\u2014or, at least, less harmful\u2014choices.<\/p>\n\n\n\n

Consider social influence, for example. As established just above, our tendency to follow the herd can get us into serious trouble. But a savvy choice architect<\/a> can use that tendency to alter our behavior for the better.<\/p>\n\n\n\n

An experiment conducted with the citizens of San Marcos, California, illustrates the point. Working with a sample size of 300 households, researchers informed each household of its energy consumption over the previous few weeks and included the average San Marcos household\u2019s energy consumption. In the subsequent weeks, the higher-than-average energy consumers reduced their consumption, while the lower-than-average consumers increased <\/em>their consumption. Each group wanted to be average<\/strong>.<\/p>\n\n\n\n

But there was a further wrinkle in the experiment. Some higher-than-average consumers received a frowny-face emoticon along with their consumption statistics, while some lower-than-average consumers received a smiley face. The above-average consumers who received the frowning face showed an even larger reduction of consumption <\/em>than the above-average consumers that didn\u2019t receive one. And, whereas the below-average consumers who didn\u2019t receive an emoticon raised their consumption to match the average, the below-average consumers who received a smiley face continued to consume at their lower rates<\/em>. Simple social cues had outsize effects on behavior<\/strong>. The Nudge<\/em> theory of change management uses simple cues such as these.<\/p>\n\n\n\n

A Word About Markets<\/strong><\/h3>\n\n\n\n

The free market, through its plethora of choices and heated competition to provide the best services at the best price, can take some of the guesswork out of decision-making. But it can\u2019t turn Humans into Econs. In other words, only Econs have all the necessary information and experience to make the rational decision 100% of the time<\/strong>. That’s why, under Nudge <\/em>theory, change management can’t be left to the markets.<\/p>\n\n\n\n

Take the example of \u201cextended warranties.\u201d Most devices or appliances have only a minuscule chance of malfunctioning after the factory warranty expires, yet consumers are consistently convinced to pay for extended coverage (\u201cBetter safe than sorry,\u201d we might say). An Econ knows that extended warranties are always a poor investment, but Humans don\u2019t, and the firms providing the warranties have no incentive<\/a> to nudge us away from them<\/strong>. Firms in a free market can benefit just as much from human frailty as human rationality\u2014maybe more.<\/p>\n","protected":false},"excerpt":{"rendered":"

What is the Nudge theory of change management? How do you encourage changes with nudges? Nudge theory uses gentle directing or pushing to get people to make certain choices. Under Nudge theory, change management is about the individual. Read on to understand the Nudge theory, change management, and how to use nudges to push in the right direction.<\/p>\n","protected":false},"author":6,"featured_media":15971,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[34,9,24],"tags":[132],"class_list":["post-15760","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-communication","category-psychology","category-society","tag-nudge","","tg-column-two"],"yoast_head":"\nNudge Theory: Change Management for Humans - Shortform Books<\/title>\n<meta name=\"description\" content=\"Under Nudge theory, change management is about subtle actions. Redirecting behavior comes from simple cues and framing of choices. 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